Real estate hot spots warm up the areas around them

The same factors making the Heights popular raise values nearby as well

By Ford Gunter

May 1, 2014Updated: May 3, 2014 10:39pm

Photo: Cody Duty, Staff

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From left, Meadow Lam, 6, her father, Herman Lam, her sister, Autumn Lam, 3, and mother, Carrie Lam, walk her to her Oak Forest Elementary School, Thursday, May 1, 2014, in Houston. The Lams decided to move to Oak Forest after touring the school and they like being able to walk their daughter there. (Cody Duty / Houston Chronicle) less

From left, Meadow Lam, 6, her father, Herman Lam, her sister, Autumn Lam, 3, and mother, Carrie Lam, walk her to her Oak Forest Elementary School, Thursday, May 1, 2014, in Houston. The Lams decided to move to ... more

Photo: Cody Duty, Staff

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Students at play during recess at Oak Forrest elementary Wednesday April 30, 2014. (Billy Smith II / Houston Chronicle)

Students at play during recess at Oak Forrest elementary Wednesday April 30, 2014. (Billy Smith II / Houston Chronicle)

Photo: Billy Smith II, Staff

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Recess at Oak Forest Elementary School finds the playground busy with children. Oak Forest has seen big increases in its home values.

Recess at Oak Forest Elementary School finds the playground busy with children. Oak Forest has seen big increases in its home values.

Photo: Billy Smith II, Staff

Real estate hot spots warm up the areas around them

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A growing population and a strong real estate market mean new "hot" neighborhoods are popping up almost as frequently as new houses, mostly in areas of town that are adjacent to already desirable spots.

"It's proximity to all the better stuff," said Andy Weber of John Daugherty, Realtors, who calls it the "bleeder effect."

The poster child for neighborhoods that get hot and spark more of the same is the Heights. The nearby Garden Oaks-Oak Forest area gained popularity over the last decade precisely because of its location, schools and easy access to Loop 610.

"This seemed like a gem," said Herman Lam, 35, who moved his wife and two young daughters to a 3,050-square-foot house with a huge backyard in Oak Forest in December.

The Lams liked Sugar Land, he said, but they often found themselves coming to Houston for Friday happy hours or weekend family outings to the zoo or museums. The house they had built, for more than $600,000, is also closer to Lam's Galleria- area job as a consultant to energy companies.

A visit to the neighborhood Oak Forest Elementary School sealed the deal.

Lam said he was thrilled to find about 30 other parents at the school on the day he toured. The teachers, he said, were passionate. And he likes that there's a public library across the road. He and his wife now walk their daughter Meadow to kindergarten each morning.

"Certainly, there are a lot more people who know about it now," Lam said of the neighborhood, where his home already has been appraised for more than he paid. "But you can still find something affordable - i.e., not in the millions."

Bleeder neighborhoods are also usually unencumbered with historic buildings like the bungalows of the Heights, which can be challenging to remodel and even trickier to tear down, lest the new owners upset their neighbors with a McMansion or a cluster of townhomes that clashes with the rest of the neighborhood aesthetic.

That, of course, makes them ripe for new construction, and thus attractive to builders as well as buyers.

Both Oak Forest and Shady Acres have seen their median price per square foot rise from $128 and $150, respectively, in 2008, to $190 and $209 in 2013, figures from the Houston Association of Realtors show.

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"Oak Forest is really popping with all that new construction in the $800,000 range," Weber said.

Likewise, he added, "People that can't afford Memorial go to Spring Valley. It's an older neighborhood, mostly teardown, and they're building the mini-mansions like they did in Bellaire."

While the market hasn't always been great - it declined slightly each of the few years before 2012 - Weber suggested part of the reason is young couples are more willing to raise children inside the Loop.

"People are OK staying here with kids now," the real estate agent said of the Inner Loop. "That never used to be the deal. There's not this compulsion to get the heck out of Dodge if they get pregnant. … I look at the parents of students now versus 10 years ago. The schools have more parents now who are better educated and have more money, so the schools get better. And of course a lot of people can afford private school, too."

Renewed interest in pockets of Montrose like Winlow Place, for example, is driven more by location and price.

A lack of deed restrictions also helps. That is perhaps most evident in the areas adjacent to River Oaks Shopping Center, where Weber said townhomes are sprouting up.

Horace Homes has been building 3,500- to 5,000-square-foot houses his entire career, Beck said. They now sell for $1 million to $1.5 million, about 15 percent more than they did in 2010.

"At this point, for a new construction inside the Loop, $1 million is about as cheap as you're going to get," he said. "It's really mostly the lot cost, though construction costs go up every year, too. All the costs are going up and up and up, but I'm continually building the same size house."